Selling is a complex and dynamic human interaction. There are a lot of things that can wrong that can cost you a deal. But there are two that tend to dominate the “reason” category for losing deals.
1. Relationships matter
I have met and spent time with Matt Dixon and Brent Adamson from CEB, the authors of The Challenger Sale. They say that their research suggests that challengers, or those who are willing to challenge their prospective clients, major in challenging and minor in relationships, where they had the second highest scores.
Right now, there is a ton of market pressure driving companies — and the people that make them up — to be more transactional. The communication methods we use are less personal than the traditional methods. The sales processes we implement are more transactional than they should be. The drive to reduce costs across all segments of the business is causing companies to move parts of the sales function inside. And a lot of salespeople believe those processes are supposed to be transacting.
The more complex, risky, and expensive the solution you sell, the more you need relationships to succeed. Not going to meet your client because it is a plane trip away is a decision to ignore how important relationships are. The trouble is your clients will allow you to be as transactional as you want to be.
Don’t be surprised when you lose because no one really knows you. If you think that being known, liked, and trusted isn’t important, try to sell without them.
2. Value matters as much
The friendship component that used to be the foundation of the relationship is no longer enough. The lack of a friendship’s ability to carry a deal is a dramatic change in sales over at least the last two decades. The dinners and the tickets to the ball game? Really nice, but still won’t substitute for real value.
Most of the time, when we believe we lose because our price is higher, we really lose because we didn’t create enough value. Sometimes we have trouble helping our clients perceive the value we create — something I won’t even pretend is easy. And occasionally, we lose because our prospective client stubbornly adheres to the immature and expensive belief that lowest price is the only real value, which is something that should have been discovered early in the process.
One of the real challenges some people have in increasing the perception of value is that they haven’t spent enough time on the relationship to have all of the conversations necessary to changing that perception. They haven’t built the trust that the additional investment they are asking for is worth paying and that their prospect will capture the additional value.
Evaluate the last few deals you lost:
Were you known, liked, and trusted?
Were you known as someone who can help deliver results?
Did you create the right level of value, making price something less an important than the real outcomes your prospective client needed?
How did you lose the last deal you lost? What was the cause you lost? What would you change if you could go back and do it all over again?